Shares of Lyft, Uber’s competitor, jump 30% after typographical error in quarterly balance sheet

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The company reported that one of the financial margin metrics should increase 500 basis points this year, but the information was corrected to an increase of 50 basis points. Chief Financial Officer Erin Brewer had to provide clarification on a conference call with analysts. Cars with Uber and Lyft stickers in California REUTERS/Lucy Nicholson A typo in the projections of Lyft, Uber’s main competitor among app transportation companies, caused turbulence in the company’s shares this Wednesday (14). Lyft incorrectly said one of its financial margin metrics was expected to rise 500 basis points this year, but the information was later corrected to a 50 basis point increase. The error in publishing the results caused a brief jump of 67% in the company’s shares, but they lost most of the gains after the correction. Chief Financial Officer Erin Brewer had to provide clarification on a conference call with analysts. Even so, Lyft shares reached a one-year high and rose around 30% this Wednesday, also supported by a solid quarterly result and a positive forecast for the company’s future. In addition to reporting improved profitability and saying it would generate positive free cash flow for the first time in 2024, the company said it cut expenses by 12% in 2023, which helped it beat Wall Street’s average estimate. Furthermore, it kept its market share intact in the face of fierce competition from Uber. According to experts interviewed by Reuters, everything points to a company that is emerging from the crisis after a few difficult years. But it’s unclear whether Lyft could face legal liability for the incident on its balance sheet. The error meant that about 48 million shares were traded in the US post-market on Tuesday, more than triple the average daily volume in the regular stock market session. “The SEC will likely review the situation given the magnitude of the stock price movement following the release of the original results and Lyft could be fined,” said Dan Coatsworth, investment analyst at AJ Bell. “As the error relates to a projection, it is likely that liability under securities regulations will not apply unless it can be proven that it was made with knowledge that it was wrong or with some intent to deceive,” said Bobby Reddy, professor of corporate law and governance at the University of Cambridge. Still, some investors may test “the limits of legal theory from other perspectives, potentially with the aim of seeking settlements,” Reddy added. Transport via app becomes more expensive

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